Trump Tariffs Rattle Supply Chains: Vietnam Footwear Exports Drop 4%, Indonesia Investment Freezes

The holiday shopping frenzy is in full swing, but the assembly lines at Southeast Asia's footwear giants are growing cold. President Donald Trump's "reciprocal" tariffs are infiltrating a key sector for Southeast Asian economies, forcing tough decisions in the region's bustling shoe factories. Foreign footwear makers are now canceling investment plans in Indonesia, while factory managers in Vietnam are absorbing rising costs, accelerating automation, and hitting the brakes on hiring.

Vietnam Feels the Squeeze

The impact in Vietnam is already showing up in the numbers. According to Reuters, the country's footwear exports to the U.S. fell by 4% in November compared to the previous year. To cope, factories are reportedly shouldering some of the additional costs, which eats into their margins. They're also pausing new hires and fast-tracking automation—a short-term solution that could have long-term consequences for the local job market.

Indonesia's Investment Chill

In Indonesia, it's the lingering uncertainty that's doing the most damage. Foreign manufacturers have reportedly scrapped plans to invest in the country, a direct response to the unpredictable trade environment. This hesitation suggests that the ongoing tariff situation is diminishing Southeast Asia's appeal as a stable manufacturing hub, forcing companies to reconsider their global supply chain strategies.